New trade deal era sees countries playing favourites, says report

International trade isn’t as simple as it used to be, conclude the authors of a new paper, who say an aggressive trade agenda is paramount to Canadian competitiveness.

Countries are increasingly competing for preferential access to markets, said David McInnes, president of the Canadian Agri-Food Policy Institute and one of the authors of Leveraging Trade Agreements to Succeed in Global Markets.

The think-tank report outlines how Canadian producers and exporters face not only non-tariff and regulatory barriers in other countries but may also be affected by another country’s access, which is a focal point of new trade deals.

“We’ve moved over time from a world where (the World Trade Organization) really struck rules on behalf of much of the trade world,” said McInnes, who wrote the paper with business adviser John Weekes and Al Mussel of the George Morris Centre.

“The point that we’ve made is that this is evolved to one of competitive trade liberalization.… We deem this to be quite a dramatic shift. As a result, we see rules applying to different countries in different agreements concerning different benefits at different times.”

The authors say Canada is late to the game in South Korea, where the United States signed a trade agreement that came into effect in 2012. That sentiment has been regularly echoed at beef and pork events in recent years.

The report cautions that even when one country catches up to another, their deals are unlikely to be the same and “preferential niches” will remain.

A Canada-South Korea free trade pact has been completed but has yet to be implemented.

In the meantime, fresh and frozen pork has been subjected to tariffs of more than 20 percent in that country, while canola oil faces an eight to 10 percent tariff.

In the case of the Comprehensive Economic and Trade Agreement with the European Union, Canada is ahead of the U.S.

Details of that deal, signed in 2013, appeared last month. The pact opens up the EU to Canadian beef and pork products and will eventually allow for 35,000 tonnes of fresh chilled beef, 15,000 tonnes of frozen beef and 3,000 tonnes of bison to enter the EU without duties.

“This is a good example of where we’ve secured a major market for Canadian products, food and beverage products and ingredients, and so now with that hard work now done and won … it now moves into the next phase, which is how do we actually deliver on that market potential?” said McInnes.

CETA drew scorn from Dairy Farmers of Canada last year for providing greater access to European cheese.

In recent weeks, the deal has also upset U.S. dairy groups. CETA provides 16,800 tonnes of new market access to EU cheese, including 800 tonnes of reallocated quota.

McInnes said his paper is intended to help identify research gaps and help assist the agri-food industry “act defensively and offensively in the context of a changing trade world.”

“I think what we’re trying to say initially is that we’ve entered a new realm where no longer is our companies and countries operating on a level playing field,” said McInnes.

“In that, over time, we’re seeing countries trying to compete against each other to create this preferential access. We foresee this only continuing.”

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